Megacity growth in the developing world is fueled by a desire to access their large local labor markets. Growing megacities suffer from high levels of traffic congestion and pollution, which degrade local quality of life. Transportation technology that allows individuals to access the megacity without living within its boundaries offers potentially large social benefits. Individuals can enjoy the benefits of urban agglomeration, while not paying megacity real estate rents or suffering from the city’s social costs. This paper presents evidence supporting the claim that China’s bullet trains are playing this role. The bullet train is regarded as one of the most significant technological breakthroughs in passenger transportation developed in the second half of the 20th century. Starting in 2007, China has introduced several new bullet trains that connect megacities such as Beijing, Shanghai, and Guangzhou with nearby cities. Through facilitating market integration, bullet trains will stimulate the development of second- and third-tier cities. By offering households and firmsother location alternatives, bullet trains help to protect the quality of life of the growing urban population. We document that this transport innovation is associated with rising real estate prices in the nearby secondary cities.
What did you set out to discover with your research?
To investigate the implications of bullet trains for market integration and sustainable urban development.
What were your most significant findings?
Through facilitating market integration, the introduction of bullet trains in China has stimulated the development of second- and third-tier cities. By offering households and firms other location alternatives, bullet trains help to protect the quality of life of the growing urban population. We document that this transport innovation is associated with rising real estate prices in the nearby secondary cities.
Were these findings surprising?
In the areas of urban economics and urban geography, these findings are not that surprising. However, the findings have important implications for the sustainable development of Chinese cities.
What are the potential implications of your findings?
Megacity growth in the developing world is fueled by a desire to access large local labor markets. Growing megacities suffer from high levels of traffic congestion and pollution, which degrade local quality of life. Transportation technology that allows individuals to access the megacity without living within its boundaries offers potentially large social benefits, because individuals can enjoy the benefits of urban agglomeration while not paying megacity real estate rents or suffering from the city’s social costs.
What is the next step for your research?
Now we are further examining the re-distributions of jobs and population triggered by the introduction of bullet trains, to see how bullet trains change China’s economic geography.
These are Dr. Siqi Zheng's written remarks. Please refer to the video interview for exact quotes.
Author Biography
Siqi Zheng, Ph.D., is an Associate Professor at the Hang Lung Center for Real Estate, and the Deputy Head of Department of Construction Management at Tsinghua University, China.
Dr. Zheng’s field of specialization is urban economics and housing markets. Her research interests include urban spatial structure, urban environment, housing supply and demand, housing price dynamics, and low-income housing policies. Examples of her research topics include: location choices of households and firms, land use and transportation, within- and cross-city compensating differentials of quality of life in real estate prices, housing supply, and green cities in China. She has published in a number of journals, including PNAS, Journal of Economic Literature, Journal of Economic Geography, European Economic Review, Journal of Urban Economics, Regional Science and Urban Economics, Real Estate Economics, Journal of Real Estate Finance and Economics. Dr. Zheng has published more than 100 papers and two books in Chinese. Currently, she is on the editorial board of Journal of Housing Economics and International Real Estate Review. Dr. Zheng has undertaken research projects funded by the World Bank, Asian Development Bank, London School of Economics, Lincoln Institute of Land Policy, National Natural Science Foundation of China, Ministry of Housing and Urban-Rural Development and National Statistics Bureau of China, among others.
Dr. Zheng is the Research Fellow at the Peking University-Lincoln Institute Center for Urban Development and Land Policy; the Research Fellow at the Center for Industrial Development and Environment Governance, School of Public Policy at Tsinghua University; and the visiting fellow at the UCLA Ziman Center for Real Estate. She is the Vice Secretary-General of the Global Chinese Real Estate Congress. Dr. Zheng is a winner of the Homer Hoyt Post-Doctoral Award in 2011. She also won the Best Paper Award from the American Real Estate Society in 2005.
Dr. Zheng teaches Regional and Urban Economics, Real Estate Price Fundamentals and Appraisal Techniques at Tsinghua University. Dr. Zheng holds a Ph.D. in Real Estate and Housing Economics from Tsinghua University, and completed a post-doctorate program in Urban Economics at Harvard University Graduate School of Design .
Related Research Papers
"China’s bullet trains facilitate market integration and mitigate the cost of megacity growth"
By Siqi Zheng and Matthew E. Kahn
Published online before print /PNAS March 18, 2013 201209247, doi:10.1073/pnas.1209247110
Press release: Bullet trains may improve quality of urban life in China
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